Cynapsus Therapeutics Completes $6 Million Short Form Prospectus Offering

TORONTO, ONTARIO--(Marketwire - March 4, 2013) -

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AS PREVIOUSLY ANNOUNCED AT 4:00PM EST ON FRIDAY, MARCH 1, 2013 - Cynapsus Therapeutics Inc. (TSX VENTURE:CTH) is pleased to announce that it has completed its previously announced short form prospectus offering (the "Offering") of units ("Units") for aggregate gross proceeds of $6,008,000. Concurrent with the closing of the Offering, the Company and the holders of Series A to E debentures agreed to convert $4,031,406 in debt for common shares and warrants. In addition, the Company completed a share consolidation of the Company's issued and outstanding common shares concurrent on the basis of one (1) new common share for every ten (10) common shares issued and outstanding.

Anthony Giovinazzo, President and CEO of Cynapsus stated: "I am proud to announce this $6 million transformative financing, as well as the conversion of $4 million in debt to equity. The proceeds of the offering will allow Cynapsus to complete later this year a critical de-risking bioequivalence study of our APL-130277 drug candidate for Parkinson's disease. This financing, together with the recent grant from the Michael J. Fox Foundation and the US Patent Office's notice of allowance, clearly put Cynapsus on a more solid foundation."

"In this financing we also attracted an international specialty pharmaceutical partner who will become a significant shareholder and has agreed to provide strategic advice as part of our Board of Directors," Mr. Giovinazzo continued. "This strategic investor brings immense expertise and experience in drug reformulations, approvals, commercialization, distribution, as well as the US FDA regulatory pathway which Cynapsus will be pursuing for APL-130277. Our plan remains intact, namely to de-risk the project over the next 2 years so as to attract significant attention and valuation in the eyes of potential partners, including the strategic investor and major global and specialty pharmaceutical companies. Given recent merger and acquisition activity in the Pharma-Biotech sector, we believe there is a significant opportunity for an event that would see a substantial return to investors within a 2 to 3 year timeframe."

The Offering

Pursuant to the Offering, the Company issued an aggregate of 13,061,688 Units at a post-consolidation price of $0.46 per Unit raising gross proceeds of $6,008,000. Each Unit consists of one common share (each, a "Common Share") in the capital of the Company and one common share purchase warrant (a "Warrant") of the Company. Each Warrant will entitle the holder to purchase one Common Share (each, a "Warrant Share") at a price equal to $0.575 per Warrant Share for a period of 60 months after the closing of the Offering, except that the Warrants will be cancelled if they are not exercised within 30 days after prior written notice from the Company that the closing price of its Common Shares on the principal stock exchange of the Company had been $1.38 or greater for 20 consecutive trading days. The Units were immediately separated on closing into Common Shares and Warrants.

The net proceeds of the Offering will be used to fund the Company's CTH-201 Bioequivalence Study and for general working capital purposes.

Concurrent with the closing of the Offering, holders of $4,031,406 in Series A to Series E debentures agreed to a "shares-for-debt" exchange (the "Shares for Debt Exchange"), which resulted in 8,761,399 Common Shares and 4,380,700 debenture warrants ("Debenture Warrants") being issued. Each Debenture Warrant entitles the holder to acquire one Common Share at a price equal to $0.575 for a period of 24 months after the Closing Date. The common shares issued under the Shares for Debt Exchange are subject to a hold period of four months expiring on July 2, 2013.

The offering was led by M Partners Inc. (the "Agent"). The Company paid to the Agent received a work fee in the amount of $87,500, plus HST, and the Company has agreed to reimburse the Agent for certain expenses incurred in connection with the Offering. In addition, the Company paid a cash commission to the Agent of $47,088 and issued 102,365 non-transferable compensation warrants, each exercisable to purchase one Cynapsus common share on the same terms as the warrants issued in the Offering.

The Company also paid other registered dealers and brokers that assisted with the Offering total cash commissions of $117,500 and issued 255,434 non-transferable compensation warrants, each exercisable to purchase one Cynapsus common share on the same terms as the warrants issued in the Offering.

Strategic Investor and New Control Person

A strategic pharmaceutical investor ("Strategic Investor") paid $3,500,000 for 7,608,696 Units of the Offering resulting in ownership of more than 21% and 27% of all the issued and outstanding Common Shares on a basic and fully diluted basis, respectively. As a result, the Strategic Investor is considered a new "Control Person" under the policies of the Exchange. Pursuant to Section 1.10 of Exchange Policy 4.1 Private Placements, the Company was required to obtain shareholder approval for a new Control Person as a condition of closing the Offering. This approval was obtained by written consent of shareholders holding more than 50% of the issued listed shares of the Company.

Following the completion of the Offering, the Board of the Company agreed to allow the Strategic Investor to nominate two new directors, subject to Exchange approval. The Exchange is currently reviewing the Personal Information Forms ("PIFs") for the two nominees. If and when approved, the Company will have a total of nine (9) directors until the next Annual General Shareholder Meeting.

Stock Option Grant

Effective March 1, 2013, the Company granted stock options to acquire 373,316 common shares. The stock options were granted to the President and CEO of the Company at an exercise price equal to $0.46 per share and with an expiry of 5 years.

US Disclaimer

This press release does not constitute an offer to sell or a solicitation to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended ("the U.S. Securities Act"), or any state securities law and may not be offered or sold to, or for the account or benefit of, persons in the United States or "U.S. persons", as such term is defined in Regulation S promulgated under the U.S. Securities Act, unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Cynapsus Therapeutics

Cynapsus is a specialty pharmaceutical company developing the only non-injectable (i.e. sublingual) delivery of the only approved drug (apomorphine) to be used as a rescue therapy for "off" motor symptoms of Parkinson's disease. Over one million people in the U.S. and an estimated 5 million people globally suffer from Parkinson's disease. Parkinson's disease is a chronic and progressive neurodegenerative disease that impacts motor activity, and its prevalence is increasing with the aging of the population. Based on a recent study and the results of the Company's Global 500 Neurologists Survey, it is estimated that between 25 percent and 50 percent of patients experience "off" episodes in which they have impaired movement or speaking capabilities. Current medications only control the disease's symptoms, and most drugs become less effective over time as the disease progresses.

Cynapsus' drug candidate, APL-130277, is an easy-to-administer, fast-acting reformulation of apomorphine, which is approved in an injection formulation to rescue patients from "off" episodes.
Cynapsus is focused on maximizing the value of APL-130277 by completing pivotal studies in advance of a New Drug Application expected to be submitted in 2015. Cynapsus anticipates a trade sale or out-licensing to an appropriate global pharmaceutical partner before such an application is submitted.

More information about Cynapsus (TSX VENTURE:CTH) is available at www.cynapsus.ca and at the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com.

Forward Looking Statements

This announcement contains "forward-looking statements" within the meaning of applicable Canadian securities legislation. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Cynapsus to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks and uncertainties relating to Cynapsus' business disclosed under the heading "Risk Factors" in its Annual Information Form filed on November 1, 2012 and its other filings with the various Canadian securities regulators which are available online at www.sedar.com. Although Cynapsus has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cynapsus does not undertake to update any forward-looking statements, except in accordance with applicable securities laws.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.